Car donation and tax credit question
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Anonymous
| If I donate my car and receive a tax credit, will I receive the full credit amount if my taxes are less than the car's value? |
Anonymous
| you get a deduction (which reduces your taxable income) not a credit (which reduces your taxes). |
Anonymous
| thanks, I was under the impression that it reduced my taxes. |
Anonymous
| I am always shocked how many ppl don't get the difference between deduction and credit. I wish they would make some sort of PSA commercial about it. |
Anonymous
|
It probably would reduce your taxes, if you currently itemize deductions, but it's not a dollar for dollar reduction. If you pay 20% marginal income tax rate, then you would get $1 off your taxes for every $5 you donate.
If you take the standard deduction normally, then it might or might not reduce your taxes. |
Anonymous
"Shocked". A lot of people don't itemize their deductions. Not that much of a brain stretch to realize this. OP, others were correct, it may decrease your tax liability if you otherwise itemize your deductions. |
Anonymous
Op here, I know what a deduction and is a credit, no where in my post did I say I didn't know the difference. I actually thought that I could skip dealing with the sale of my old car by donating and getting a tax credit, hence my question about the amount credited. |
Anonymous
| Op again, and thank you for the helpful responses. |
Anonymous
| It might be a bigger savings than that, since charitable deductions are one way around the AMT. |
Anonymous
Then the answer is the same: There is no tax credit for donating a car. Never has been, never will be. |
Anonymous
| Also, there are very few refundable tax credits in the tax code (EITC and child credit are the only two for individuals I can think of). That goes to your question about getting the entire (nonexistent) tax credit if it were to (hypothetically) exceed your tax liability. |